Superannuation funds returned average growth around 7.2 per cent in the 2016 calendar year, the fifth positive year in a row, helped by a Santa/Trump rally boost of 2.1 per cent in December, according to a report by independent researcher SuperRatings.

The research firm said the gains were made despite concerns about low global growth and downside risks, which were exacerbated by the China growth scare that caused markets to fall steeply at the beginning of 2016.

“Superfunds struggled at the start of the year, with many posting significant losses, but recovered as markets stabilised,” said SuperRatings chairman Jeff Bresnahan.

“Of course, we then had Brexit and the corresponding rebound, a bearish October ahead of the US election, and then a big lift to end the year, led by equities.”

The 7.2 per cent rise is slightly below the 7.7 per cent per annum average seen over the past seven years, SuperRatings said.

While volatility may have induced a few nosebleeds, funds have generally had a strong positive year, ending the calendar year above their long-term objectives.”

Longer-term returns sit close to funds’ inflation targets, with the seven-year return estimated at 7 per cent per annum, while the 10-year return is 5.2 per cent, still affected by the global financial crisis which began nearly a decade ago.

Superannuation funds invest heavily in Australian stocks and their growth has mirrored the share market which posted a capital gain of 7 per cent in 2016, its best performance in three years.

– ABC